Emerging-market stocks yesterday advanced and currencies pared losses, as investors wagered the US Federal Reserve’s dovish stance on interest rates would weaken the US dollar and boost the appetite for higher-yielding assets. Russia’s ruble rebounded.
Saudi Arabian shares rose toward the highest level since Jan. 6, trading within 0.6 percent of a bull market. Indian equities extended a three-week rally and bonds gained for an eighth day as investors bet the central bank would reduce borrowing costs. China’s benchmark gauge rose to a two-month high after policymakers loosened controls on margin lending. The ruble rose as Brent crude traded near US$41 a barrel.
Developing-nation stocks entered a bull market last week and inflows into exchange-traded funds that buy emerging-market assets increased to the most in almost two years as the odds of an aggressive US rate policy receded. With European policymakers taking borrowing costs deeper into the negative territory, investors are betting central banks will remain supportive of growth.
“It’s a continuation of the dovish Fed trade,” said Michael Wang, a strategist at hedge fund Amiya Capital LLP in London. “The [US] dollar could continue to trade weaker against emerging currencies until US data turn much stronger. The Fed could have a higher tolerance for inflation before they turn more hawkish.”
The MSCI Emerging Markets Index gained 0.1 percent to 827.55 at 10:43am in London, rising for a fourth day. Six of the 10 industry groups advanced, led by healthcare stocks. The gauge trades at 11.6 times forecast earnings of its constituents, a 27 percent discount to advanced-nation shares.
A gauge of 20 developing-
nation currencies slipped less than 0.1 percent.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by